Alcan to up 6063 aluminum extrusion billet base price by 2 cents

Rio Tinto Alcan is increasing its base price for 6063 aluminum extrusionbillet by 2 cents/lb on new business placed for shipment on or after October1, it said in a customer letter obtained by Platts. In addition, Rio Tinto Alcan has decided "to maintain unchanged ourstandard terms of payment for the time being" at net 30-day payment. Alcan andAlcoa in 1999 shifted to net 30-day payment terms for billet from net 60. Thecompany said it recognizes "the current challenging economic environment" andsaid, "We will be vigilant in seeking to ensure that our receivablesperformance matches the terms of payment agreed with our customers."Rio Tinto Alcan explained that it is trying to keep pace withunprecedented rising costs associated with the production of extrusion billet. All contractual obligations will be honored as per existing agreements. According to the letter, the cap on its current energy surcharge will be1 cents/lb, although increasing to 1.5 cents, effective January 1, 2009. "Additionally, adjustments to a limited number of other billet alloy premiumswill be made," said the letter. "Over the last decade we have worked in aresponsible manner to control costs in a way that minimized any significantburden to our valued customers. However, recent inputs and raw materialsrequired to produce and ship extrusion billet have exceeded our ability toabsorb these costs on a continued basis."Alcoa Materials Management in August raised primary aluminum billet alloypremiums by 20%, in response to cost increases in alloying agents and energyand logistics costs. --Washington (Platts)